LVALM

Comprehensive Asset Liability Modeling System

LVALM is a complete asset liability system designed to forecast a plan’s liabilities, assets, and future required contributions based on specific sets of assumptions and funding policies as selected by the user. Assets can be projected on either a deterministic or stochastic basis and liabilities can be projected on a closed or open group population. Both pension liabilities (based on results from LVVal, our pension valuation system) and OPEB liabilities (based on results from LVMed, our post-employment benefit valuation system) can be forecast up to 120 years.

Deterministic forecasting relies on the plan achieving the user’s expectation of asset returns. Stochastic forecasting runs a series of random samples to determine the likelihood that the plan’s assets will reach a certain level. These random samples utilize the expected rate of return and volatility of each asset class as well as the correlation of each asset class to the other classes. This allows the user to compare the impact of different investment policies on future pension costs and the plan’s exposure to risk.